Build Richer Customer Relationships Using 'Small Data'

Treat your customers like people, not marketing segments. The key: pay attention to tweets, Facebook posts and other data that can help personalize the relationship.

We live in an age of data. Every two days, we create as much information as we did from the dawn of civilization until 2003. Such an explosion has happened because everyone now has the tools to share content with pretty much the entire world.

For businesses, there's more information about customers and potential customers than ever before. This means that every interaction between a business and a consumer is crucial because the impact of both positive and negative interactions can be amplified by that person and his or her social network. The traditional rules of marketing don't apply anymore. Customer engagement matters more than reach because the right engagement with the right people can have a greater impact than any Super Bowl advertisement. So, how can companies create personal engagement?

There's a temptation to adapt traditional analytical marketing techniques like segmentation, propensity modeling, etc., and bring them into the big data era. So, companies and management gurus are focusing on how all the data that customers are producing about themselves can be turned into models that then serve up the right content, offers and pricing. This type of marketing definitely needs to be done, but it isn't really going to create engagement. Yes, the offers will get better, but you're still treating customers as "segments" or "personas," rather than people. To have meaningful interactions, you need to use what I call customer "small data" such as tweets, blog posts, LinkedIn job title updates, questions on Quora and pictures on Pinterest, to name a few examples.

Credit card companies have always been leaders in data-driven marketing, but they are missing the boat on customer small data. Recently, I received an email offer from a credit card company offering the type of rewards I would want based on my purchasing habits, Web browsing habits and demographic. But did that interaction create an emotional connection between me and the company? In a word, no. Imagine instead that the company used the same data to send me a gift certificate for my favorite restaurant to thank me for being a customer. I would have felt entirely different about the company and it wouldn't have cost them any more than the rewards program they offered me.

Becoming a customer company today requires a fundamental shift in thinking. Traditional thinking is focused on using information and data to present the right offer or message. But the platforms that customers use to express themselves aren't just data sources, they're places where companies can really listen to customers. People like wine and social media expert Gary Vaynerchuk have talked about the Thank You economy and how personal engagement is the key to becoming a successful business. The shift is from presenting offers to segments to engaging with people via their small data. Companies as varied as Comcast and KLM have shown what happens when you engage directly with customers.

So, how can you use small data to become a customer company? First, listen to the questions people are asking about your company or industry on Twitter, LinkedIn or Quora, and try to help them in a personal way. Vaynerchuk talks about how he spends hours on Twitter answering people's questions about chardonnay and chenin blanc. Find the equivalents for your business. Follow your customers and try to personally thank them. Recently, we saw that one of our customers was going to Europe (based on his tweets) and sent him a travel charger. He was thrilled and thanked us on Twitter.

As a result, 18,000 of his followers now have a positive impression of our company, Appirio. This is just one example of what can happen when you focus on small data.

Customers are still people and there is no substitute for the power of knowing things about them like their alma mater, their favorite bottle of wine or how they like to spend their weekends. With social media, this level of customer intimacy is possible.

Don't listen to those who say that knowing customers as individuals is not possible in today's world of online, arms-length transactions. Social media and the Internet make it possible to create personal relationships at scale. If a cable company like Comcast and an airline like KLM can form personal relationships with customers, so can you.

I have to disagree. Meaningful business relationships don't happen at scale. Social media can enable interpersonal connections, but in the end it's someone mailing a charger to someone else. It's one-to-one.

Yeah, it's a combination of paying attention to transactional data you already have at the individual level and paying more attention to the social signals people are putting out there. Especially in a B2B environment like Appirio's our customers are excited when we read their blogs, retweet their posts, etc.

I'm a long-time Entertainment Weekly subscriber and sometimes they send me movie passes. While I don't think that comes from trolling my social media content (I think I get them because I might be their longest-running subscriber) it is a nice personal touch that keeps me excited about the brand.

Part of this just involves paying attention to transactional data you already have, rather than an advanced social strategy. Example: Southwest has moved into my airport in a big way, so I've been flying it a lot lately. I'm far from some platinum miler, but it noticed enough to send me a few free drink coupons. While I haven't used any yet (really!), I noticed. And I noticed no other airline I'd ever flown had sent me anything but a credit card offer.

David, the theme is really around personalizing interactions between your company and customers. So, yeah, providing those personality traits in a way that's easily consumable by customer-facing people would be a great enabler. Good news is that platforms like Salesforce are already making this happen by integrating social with their applications.

I am a big believer in the relationship between Twitter, customer interaction and brand loyalty. I have interacted with companies via Twitter, and when I get a personalized response, it not only improves my perspective on that company, but enhances my loyalty to the company and the product. Social media is a two-way street, not to be used only to get the message out, but also to engage with the customer on a granular level.

Is the theme here automated personalization of content? Or more like making sure salespeople and customer service reps can get at at-a-glance analysis of the personality you've displayed in social media or other interactions?

ITís tried for years to simplify data analytics and business intelligence efforts. Have visual analysis tools and Hadoop and NoSQL databases helped? Respondents to our 2014 InformationWeek Analytics, Business Intelligence, and Information Management Survey have a mixed outlook.